NOOK REPORT: Shares in Barnes & Noble are up more than 20% in premarket trading following a report by TechCrunch indicating that Microsoft is considering buying the digital assets of Nook Media business for around $1 billion. The proposal calls for Microsoft to redeem preferred units in Nook Media—the software company already owns a stake—in exchange for the digital operation, which includes e-books, as well as Nook e-readers and tablets, the story notes, citing internal documents. Such a move would eliminate some of the uncertainty about Barnes & Noble’s future, amid potential plans to take the stores division private. It also could give a new lifeline to the Nook business, which has struggled from fierce competition from the likes of Apple and Amazon’s Kindle.

PAY-TV EARNINGS: A busy day for pay-TV earnings. Dish Network reported a drop in first-quarter profit as it added fewer new subscribers and was hurt by higher costs and weaker Blockbuster results. Expect Dish Chairman Charlie Ergen to receive lots of questions about his bid for Sprint during today’s conference call. Read More »

Law Blog’s next post is brought to you with limited commercial interruption by…. How about we skip ahead and get to the story about the latest salvo in the battle over ad-skipping devices.

On Thursday night Dish Network Corp., filed a brief in the Court of Appeals for the Ninth Circuit, rebutting claims by Fox Broadcasting that the satellite-TV company’s AutoHop feature poses a grave threat to Fox’s ad-supported business model.

To recap, Dish’s AutoHop allows customers watching recorded prime-time shows to wipe out commercials. It basically automates the skipping ahead feature of DVRs, so you don’t have to grab the remote every time you want to avoid 30-second sales pitches from, say, a gecko or a duck.

In November, a federal district judge stymied Fox’s effort to shut down AutoHop, denying its motion for an injunction on the grounds that Fox didn’t demonstrate sufficient damages to justify shelving the feature. Fox then appealed, claiming copyright infringement.

What’s at stake here? From Dish’s point of view, we’re talking about the American way of life.

“At the expense of the real public interests at stake here — privacy, consumer autonomy, and technological innovation — a preliminary injunction will serve only Fox’s private commercial ends,” says Dish in its brief.

A Fox spokesman said in an email to Law Blog on Friday: “The hyperbole and misstatements in their brief are simply another attempt by Dish to generate interest in an illegal product that clearly infringes on our copyrights.”